By Dan Molinski 

-- U.S. oil prices rose to their highest level in nearly three weeks Monday on continued U.S.-Iran tensions and as major crude producers, including Saudi Arabia, signaled they may maintain production cuts until the end of this year.

-- West Texas Intermediate futures, the U.S. oil benchmark, ended 0.5% higher at $63.10 a barrel on the New York Mercantile Exchange. It was the highest closing price since May 1 and the fourth increase over the past five sessions.

-- Brent crude, the global oil benchmark, closed 0.3% lower at $71.97 a barrel on London's Intercontinental Exchange.

HIGHLIGHTS

Global Supplies: U.S. oil prices rose last week, snapping a streak of three consecutive weekly decreases, as heightened tensions between Iran and the U.S. and its allies sparked fears of supply disruptions in the oil-rich Middle East. On Monday, the market notched further gains after the Organization of the Petroleum Exporting Countries inched closer to extending crude-production cuts until the end of the year to limit supplies.

OPEC members and some non-OPEC oil producers including Russia met over the weekend in Jeddah, Saudi Arabia as a precursor to next month's summit in Vienna. The delegates suggested production quotas agreed to in December when U.S. oil prices were in the $40s per barrel may have to continue until the end of 2019 due to a continued fear of an oil glut. The group agreed last December to cut output by a collective 1.2 million barrels a day.

"We started [the week] off strong in the oil market as OPEC signaled it would keep production cuts in place until the end of the year and the odds of a conflict between the U.S. and Iran seem to be rising," said Phil Flynn, senior market analyst at Price Futures in Chicago.

U.S.-China: Despite the mostly bullish sentiment emanating from OPEC, oil prices continued to be held back by worries that global demand for oil could take a hit if negotiations between the U.S. and China continue to drag on without a final trade deal, especially since each side continues to ratchet up tariffs.

Patrick DeHaan, head of petroleum analysis at gasoline price-tracking firm GasBuddy, said the trade dispute could provide further relief at the pump for the U.S. driving public, where the average price for a gallon of regular gasoline fell last week by 2 cents, to $2.84.

"With a trade deal with China seemingly more and more unlikely, we may continue to see weakness in oil and gasoline prices," said Mr. DeHaan. "We continue to believe that additional slow relief will trickle to pumps in the next week as more refiners get back into the game and boost production."

INSIGHT

Venezuela Fuel: The economic, social and political crisis continued in oil-rich Venezuela, and Nicholas Watson at advisory firm Teneo said Venezuelans are likely to continue to face miles-long waits to fill up their vehicles with gasoline. "Fuel shortages are likely to continue this week amid the continuing collapse of the refining network and as sanctions add to the problems experienced by the oil sector," Mr. Watson said in a research note. "Large lines at gas stations have been reported in several states, with National Guard (GNB) units deployed to maintain order in some areas. The regime will continue to wholly blame sanctions for the situation."

AHEAD

-- The Energy Information Administration is due to release its weekly report on U.S. oil inventories on Wednesday morning.

Write to Dan Molinski at Dan.Molinski@wsj.com

(END) Dow Jones Newswires

May 20, 2019 15:14 ET (19:14 GMT)

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